Creating low consumer product expectations

The introduction of generic grocery products brought warnings from trade observers that retailers might suffer negative consequences from consumer dissatisfaction with these products. This study investigated consumer expectations and the degree of satisfaction provided consumers by one category of generic products. The study also examined some relationships between the creation of these satisfaction levels and appropriate retail strategies.The study consisted of 320 homemakers evaluating the effect on posttrial satisfaction of positive and negative disconfirmation of expectations concerning generic peaches. The findings suggest that positive disconfirmation increased satisfaction ratings, whereas negative disconfirmation decreased satisfaction ratings. The relationship between merchandising techniques utilized on generic products and consumers' formation of expectations as observed in the study indicates that, in terms of creating satisfaction, promotion of generic products with essentially negative cues has been appropriate.     

And the winner is... An empirical evaluation of unitary and collective labour supply models

An empirical evaluation is presented of two competing flexible labour supply models. The first is a standard unitary model, while the second is based on the collective approach to household behaviour. The evaluation focuses on the testing of the model’s? theoretical implications and on their ability to identify structural information, like preferences and the intrahousehold allocation process. Models are applied to Dutch microdata from the DNB Household Survey. The unitary model cannot be rejected for male and female singles, while it is rejected for a sample of couples. The alternative collective model cannot be rejected for the same sample, allowing identification of individual preferences and an intrahousehold sharing rule that can be used as a basis for welfare economic policy evaluations.     

Towards a concept of genetic risk tolerance: a risk analysis perspective

The starting point of the MindTheRisk project has been to raise socio-political questions about whether lay public’s understanding is satisfied about the genetic information they receive, and to what extent regulators do take this aspect on board when they decide to allow or restrict genetic testing or to develop communications about genetic testing. This article draws on the concepts that have emerged among the risk research community to tackle “risk tolerance’’. It explores the application of those concepts to the sharing and regulating of genetic risk information. We start with a conceptualisation of risk acceptability/tolerability in the genetic context, before turning to concrete hurdles that need to be overcome and questions that need to be answered. Finally, we suggest some direction for policy. The paper is based on an in-depth review supplemented by pilot interviews conducted with the European Medicines Agency, National regulatory agencies, academic and members of a patient organisation, all directly involved in policy.     

Should smart investors buy funds with high past returns?

We fully characterize the equilibria in a gme between a fundmanager of unknown ability who control the riskiness of hisportfolio and investors who only observe realized returns. Wederive two types of equilibria. The first one is such that (i)investors invest in the fund if the realized return falls withinsome interval, i.e., is neither too low nor too high, (ii) agood manager picks a portfolio of minimal riskiness and (iii)a bad manager picks a portfolio with higher risk, "gambling"on a lucky outcome. The second type of equilibrium is more traditional:(i) investors invest in the fund if the observed return is largerthan some threshold, and (ii) good and bad managers choose thesame risk level.     

Measuring International Skilled Migration: A New Database Controlling for Age of Entry

Recent data on international migration of skilled workers defineskilled migrants by education level without distinguishing whetherthey acquired their education in the home or the host country.This article uses immigrants' age of entry as a proxy for wherethey acquired their education. Data on age of entry are availablefrom a subset of receiving countries that together represent77 percent of total skilled immigration to countries of theOrganisation for Economic Co-operation and Development. Usingthese data and a simple gravity model to estimate the age-of-entrystructure of the remaining 23 percent, alternative brain drainmeasures are proposed that exclude immigrants who arrived beforeages 12, 18, and 22.     

How limiting is finance for Dutch dairy farms? A dynamic profit analysis

Accessibility to financial resources is considered a prevalent problem in the agricultural sector. We develop an approach to quantify the long-term opportunity costs of financial constraints in relation to peers who do not face any financial constraints. Using data on past financial performance, we assess creditworthiness and the size of an additional accessible bank loan to farmers. Combining this with data on reported expenditure, we determine the accessible finance. We quantify the opportunity cost as the forgone dynamic profit (intertemporal profit in current-value terms) from financial constraints. Using data envelopment analysis, we apply our approach to 264 specialised Dutch dairy farms for the years 2006–2017 and explore the potential impact of changes in finance provision for several scenarios. Our results show an increasing gap between frontrunners and other farmers, as the latter generate progressively less dynamic profit in comparison to their best peers. The gap between the dynamic profit of the average farm and that of its best peers from their production and investment decisions made over the span of 1 year grew from €40,040 in 2009 to €114,548 in 2017. However, the growth is not driven by insufficient access to finance. Financial constraints can only explain 6% of the forgone dynamic profit in 2009 and as little as 1% for 2017. The number of farms classified as financially constrained in comparison to their peers decreases in our sample from 44% in 2009 to 8% in 2017. This suggests that non-financial factors are driving the growing gap.     

The battle for the essence of entrepreneurship

Nicolai Foss and Peter Klein have penned a most remarkable book on the theory of the firm. They offer a rich analysis of the economic organization through the lenses of various approaches including Austrian economics and neo-institutional economics. Their work is a welcome addition to the field of entrepreneurship studies, as it focuses on the role of entrepreneurship within established organizations. While I embrace most of the authors’ conclusions, I disagree with a central piece of their analysis: The rejection of the Kirznerian framework. In establishing judgment as the fundamental explanans of the theory of entrepreneurship, Foss and Klein introduce the bias of seeing entrepreneurship as allocating resources in firms. Moreover, introducing the process of judgment does not offer new insights that cannot be obtained through Kirznerian discovery analysis. Fundamentally, the essence of entrepreneurship is at stake. And it is not a debate about semantics. It is my contention that Israel Kirzner offers a more fundamental theory of entrepreneurship — one that can be applied within and beyond the realm of the firm, and that helps us explain social change, market processes, development, and growth.     

The Impact of Foreign Trade on the Employment of Unskilled U.S. Workers: Some New Evidence

This paper explores four empirical relationships reflecting the impact of foreign trade on the employment of unskilled workers: (i) the direct relationship between net exports and embodied education of the corresponding goods; (ii) the changes in domestic prices accompanying changes in net exports; (iii) the relationship between real or potential import competition and defensive measures such as more investment or increasing the skill level of the labor force; and (iv) the relationship between foreign trade and domestic prices. None of these exercises suggests that foreign trade has much impact on the employment of less skilled U.S. workers.